The gap between spot and contract freight rates is widening sharply. Van contract rates have climbed 19.3% year over year, while National Truckload Index (NTI) spot rates have dipped roughly 5% month over month — a divergence that FreightWaves CEO Craig Fuller says procurement teams should not mistake for a softening market. The distinction matters because contract rates govern the vast majority of truckload freight moved under negotiated agreements, while spot rates reflect only the marginal, transactional portion of the market.

Presenting the SONAR Update on Tuesday, Aug. 12, Fuller cautioned that the spot rate decline reflects some seasonal softening but, more significantly, signals that carriers and brokers are pricing forward risk into committed rates as new mini-bids and contract renewals roll in. In typical freight cycles, spot rates move first and contract rates follow with a lag, meaning the current contract escalation likely reflects pressures that spot markets signaled earlier.

"Don't get fooled by the short-term spot bit of decline," Fuller said. "The contract rates rising is a huge part of that." He urged procurement teams to continue benchmarking against contract rates and to prepare for the sustained double-digit increases that major carriers have flagged in recent earnings calls.

Modal conversion is emerging as the market's leading indicator, Fuller noted. Truckload tender volumes are down approximately 2% overall, yet intermodal container volumes are up 2% over the same period — a simultaneous shift suggesting deliberate shipper strategy rather than demand destruction. Even a single-digit percentage shift in modal share can represent a meaningful volume of loads diverted from truckload carriers, given that intermodal typically accounts for a modest slice of domestic freight relative to trucking's dominant position.

The 32% cost spread between intermodal and truckload rates is a primary driver, according to FreightWaves market analyst Zach Strickland. "The fact that you see a 32% spread on the cost is — you can't ignore it," Strickland said.

Intermodal growth is concentrated in an unexpected geography. While Los Angeles volumes are up year over year, Atlanta and Chicago are posting significantly larger growth rates, suggesting that the capacity crunch is pushing freight onto eastern rail corridors more aggressively than traditional West Coast import lanes, noted Julie Van de Kamp. She pointed to BNSF's strong recent earnings and JB Hunt's commentary as confirmation that rail is capturing meaningful share from truckload carriers.

Van de Kamp and Strickland emphasized that the intermodal shift may be structural rather than cyclical. Large intermodal providers have told FreightWaves that shippers who had never previously used intermodal are now adopting it and staying with it. "It's sticky. It's very sticky, 'cause it's not like somebody's gonna just pull that infrastructure right back off," Strickland said.

Indianapolis offers a case study in why headline numbers can mislead. Van rejection rates in the market have eased modestly, but the HAL Index remains above 90, and Indianapolis registers deep blue on the SONAR map — well above the national average. Reefer rejections in the market are still rising, reflecting the city's heavy concentration of grocery, refrigerated, frozen, and fulfillment operations, including major Amazon and FedEx facilities. Spot rates out of Indianapolis continue to climb.

"From everything I can see, Indy is still quite hot," Fuller said.

The broader picture: van contract rates are up 19.3% year over year even as NTI spot rates fall roughly 5% month over month, a gap that carriers and brokers are pricing with forward risk in mind. Intermodal container volumes are up 2% while truckload tender volumes are down 2%, driven by a 32% cost advantage that industry participants describe as producing sticky, long-term modal shifts. Meanwhile, Indianapolis's HAL Index remains above 90 with reefer rejections still rising despite a modest dip in van rejections — underscoring the need for market-level context beyond headline data.

Source: FreightWaves